Deal Check - First House Hack

[Colin Wyatt]

Hi, I appreciate any time you spend looking at this deal I'm evaluating!

My wife and I are looking to get into our first deal as a house hack. We're looking at a house that's bigger than we intended, but the numbers seem really good, especially for our market, which is light on cash-flow in general. We'd be holding this long term.
It's a 1980s build, 5/4 on one unit, 4/3 on one unit, and an efficiency apartment which has been rented in the past with questionable legality (we'd have to work through the permitting/HOA to get it square). 1 unit is rented only, so we'd occupy one and rent one out for now, but I'm just analyzing as a pure investment None of the rehab needs to be completed before move in, and we'd likely be doing a lot of work ourselves over time (kind of a live in flip).

List price: $454,900
Offer price: $430,000
ARV: $526,000
Rehab: $30,000 (cosmetic, but it has a lot of square feet)
Total Cash In: $58,000 (down payment, closing costs, rehab)
Rent: $4,800 total 
       Unit 1 - $2,200
       Unit 2 - $2,000
       Unit 3 - $600
Total expenses: $2,285
NOI: $2,370
Net Cash Flow: $720 (with property management) $1,380 (self managed)

I show that I'll have about 15% COCR and $142k of equity after the first year.

Thanks for your help with a sanity check and let me know if there's something else you'd be looking at for it. 

[Jacob Simpson]

@Colin Wyatt You are correct that the CoC target will vary depending on the area. Since this is a house hack, you will be tied to the fates of your local economy (not necessarily a bad thing). I would take a 12% return on my cash all day long, provided I didn't have to invest huge portions of my time into it. But, I'm at a different stage in life!

Per @Brandon Turner's consistent advice: It's better to get started and do something, rather than get into analysis paralysis.

Or, as I always say, "Don't let perfect get in the way of better."

Congratulation on what sounds like a great family and a great first foray into REI! Best of luck!